Insurance Company of the State of Pennsylvania v. Great Northern Insurance Company (Lawyers Weekly No. 10-030-16)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us SJC-11897 INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA vs. GREAT NORTHERN INSURANCE COMPANY. Suffolk. November 2, 2015. – March 7, 2016. Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ. Workers’ Compensation Act, Insurer, Coverage, Election of remedies. Insurance, Workers’ compensation insurance, Contribution among insurers, Insurer’s obligation to defend. Contribution. Tender. Election of Remedies. Certification of a question of law to the Supreme Judicial Court by the United States District Court for the District of Massachusetts. Barbara I. Michaelides, of Illinois (Aaron S. Bayer, of Connecticut, with her) for the plaintiff. Jennifer C. Sheehan (Richard J. Shea with her) for the defendant. Laura Meyer Gregory, for Massachusetts Defense Lawyers Association, amicus curiae, submitted a brief. GANTS, C.J. The United States Court of Appeals for the First Circuit certified the following question to this court, pursuant to S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981): “Where two workers’ compensation insurance policies provide coverage for the same loss, may an insured elect which of its insurers is to defend and indemnify the claim by intentionally tendering its defense to that insurer and not the other and thereby foreclose the insurer to which tender is made from obtaining contribution from the insurer to which no tender is made?” We answer “no” to the question. Where, as here, two primary workers’ compensation insurance policies provide coverage for the same loss arising from injury to an employee, the insurance company that pays the loss has a right of equitable contribution to ensure that the coinsurer pays its fair share of the loss. The employer of the injured employee may not prevent the insurance company that pays the loss from exercising its right of equitable contribution by intentionally giving notice of the injury only to that insurer.[1] Background. We set forth below the relevant background and procedural history of the case contained in the certification order from the First Circuit, occasionally supplemented by undisputed information in the record. In January, 2010, an employee of Progression, Inc. (Progression), was severely injured in an automobile accident while traveling abroad on a business trip. Progression had purchased two workers’ compensation policies from two different insurers, one providing compulsory workers’ compensation coverage from the Insurance Company of the State of Pennsylvania (ISOP), […]